POLITICAL SURFING OVER ECONOMIC WAVES - PARLIAMENTARY ELECTION TIMINGIN INDIA

This paper develops a political-economic interaction model for India f or the 1960-91 sample period. India presents an ideal case for testing the political business cycle theory in the context of a parliamentary democracy with endogenous election timing. Using a mixed qualitative and continuous variable simultaneous equation estimation procedure, th e paper considers the two-way interaction that results from the contro l by the cabinet over election timing. Several conclusions can be deri ved from this study. First, the results indicate the presence of busin ess cycle-electoral interaction in India. Second, there is strong supp ort for the surfing hypothesis, implying that the Indian cabinet tends to ride on natural business waves. Third, no support is found for the manipulative hypothesis.